This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Philip Cross, December 11, 2024
Dalhousie University economics professor Lars Osberg has just published The Scandalous Rise of Inequality in Canada. His central theme is that inequality threatens economic growth, financial stability, social mobility, democracy and even the climate. At times, it seems every imaginable problem can be blamed on inequality — which makes it even more important to get the facts about inequality right.
In the chapter of the book on people at the top of the income distribution, Osberg claims that “the income share of the top one per cent … is the aspect of inequality that has changed the most in recent years.” But the chapter only presents data from the U.S., where the startling success of technology firms such as Facebook, Apple, Alphabet, Microsoft and Nvidia has driven a select number of incomes sky-high. The book’s title says it’s about Canada, but in this chapter Canadian data do not appear even though they are readily available from the World Inequality Database, where Osberg sources his data for the U.S. In fact, in this country the one per cent’s share of income has fallen since 2007, whether you look at market income, total income (earnings plus government transfers) or after-tax income.
Canada’s real problem regarding high-earners is that we do not have enough of them, not that they are gobbling up income at everyone else’s expense. Moreover, our top one per cent don’t earn nearly as much as their counterparts in the U.S. Their median income of $388,200 isn’t even half what you need to belong to the U.S. one per cent. Implying that Canadian and American incomes are equally skewed is yet another example of importing narratives without examining whether they apply here.
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Philip Cross is a senior fellow of the Macdonald-Laurier Institute.
